Crypto under scrutiny: Will Africa begin a crackdown on cryptocurrencies?

Written by: Mohammed Omran

The African continent is witnessing a remarkable shift in the way governments deal with CryptocurrenciesAfter years of divergence between countries that allowed trading in digital assets and others that merely warned against them, some governments and central banks have begun to tighten control and impose stricter restrictions on crypto activities, driven by concerns related to financial stability, money laundering, financing of illegal activities, and protecting traders from fraud.

New regulatory decisions raise questions about the future of crypto in Africa.

The most recent of these moves came in Ethiopia, where the National Bank of Ethiopia issued a new notice on July 23, 2026, reaffirming that all activities related to virtual assets are prohibited unless they obtain official authorization from the central bank. The decision not only prohibits trading cryptocurrencies but also their purchase, sale, transfer, storage, issuance, and settlement of related transactions, as well as the provision of any financial services related to digital assets.

The bank explained that the ban is not limited to traditional cryptocurrencies, but extends to all digital assets that can be traded, transferred, or used for investment or electronic payment.

This decision comes as a continuation of a series of measures taken by the Central Bank of Ethiopia during the current year, as it had previously banned direct trading between individuals (P2P) using the local currency “Birr” last February, stressing that any platforms or services that enable this type of trading are in violation of the laws unless they obtain prior approval from the Central Bank.

Ethiopian authorities assert that the aim of these measures is to protect the financial system, prevent the use of cryptocurrencies in money laundering and financing financial crimes, and limit the outflow of capital outside official channels, especially since the Ethiopian birr is the only legal tender recognized within the country.

Despite tightening restrictions on cryptocurrency trading, Ethiopia is adopting a different approach to cryptocurrency mining, as it is taking advantage of the surplus electricity generated by hydroelectric power projects, most notably the Grand Ethiopian Renaissance Dam, to attract mining companies. This reflects the separation between allowing some technical activities related to the sector and prohibiting the use of cryptocurrencies in local financial transactions.

In contrast, other African countries have opted for regulation rather than prohibition. In South Africa, authorities have subjected cryptocurrency service providers to regulatory oversight, requiring companies operating in the sector to obtain licenses and comply with anti-money laundering and counter-terrorism financing rules, as the government seeks to regulate the market without shutting it down.

Kenya is moving towards preparing a legal framework that regulates digital assets and defines the rights of investors and the obligations of companies, in light of the rapid growth in the use of cryptocurrencies and financial technology within the country, while Nigeria continues to develop its regulatory system after years of restrictions on banks dealing with crypto companies, with the country remaining one of the largest digital currency markets on the continent in terms of the volume of use.

Economists believe that the disparity between countries on the continent reflects the different priorities of each country; some governments view cryptocurrencies as an opportunity to attract investments and promote innovation and financial inclusion, while other governments consider them a source of risks that may threaten the stability of the financial system if they remain outside regulatory frameworks.

It is also estimated that Africa is one of the fastest-growing regions in the world in adopting digital assets, driven by the high cost of traditional financial transfers, increased reliance on smartphones, and weak access to banking services in some countries, which presents governments with the challenge of balancing support for innovation with the protection of markets.

In light of these developments, it appears that the future of cryptocurrencies in Africa will not be heading towards complete prohibition or absolute liberalization, but rather towards stricter control and the building of more stringent regulatory frameworks that allow for the use of financial technology while reducing the risks that may threaten local economies.